Bradford & Bingley Streamlines Operations
25 Septiembre 2008 - 4:55AM
UK Regulatory
RNS Number : 2859E
Bradford & Bingley PLC
25 September 2008
Bradford & Bingley plc
25 September 2008
Bradford & Bingley streamlines operations
Bradford & Bingley (the Company) today announces a series of initiatives to streamline its business operations and improve efficiency.
Realignment of operations
Due to the wider economic environment and the significantly reduced volume of new mortgage applications, the Company is taking action to
realign its cost base in three areas:
* Closure of the mortgage processing centre in Borehamwood, Hertfordshire.
* Significant reduction in intermediary sales team.
* Redundancy of all remaining branch based mortgage advisors.
These actions will result in the loss of 370 roles, with a targeted annualised cost savings of �15 million and anticipated one-off costs
of �14 million, the details of which are as follows.
Existing activities at the Company's mortgage processing centre in Borehamwood will transfer to the Company's larger operations centre
in Bingley, West Yorkshire. It is anticipated that the workload from the Borehamwood site will be absorbed within the current staff at these
central locations. Therefore, as a result of the closure of Borehamwood centre 300 staff located there will be made redundant. It is
expected that the site will close in the first quarter of 2009.
As announced at our Interim results, in the first half of 2008 the Company reduced the number of mortgage advisers in the branches from
160 to 50 due to lower mortgage volumes. In order to further align the shape of the business to operate efficiently, the Company has taken
the decision to remove the remaining mortgage advisers from the branch network. The Company will also restructure its Intermediary
Distribution team, reducing selling and support capability to reflect its lower lending ambitions, whilst retaining a sufficiently strong
presence to enable it to respond quickly to a return to growth.
The Company has no plans to reduce the number of branches which are at the heart of the business, and will be expanding the arrears
function by around 70 positions to increase collections capacity.
The Company also confirms it is reviewing its Head Office support functions to reduce its costs to a level that is sustainable in the
long term. This will result in a further reduction in staff numbers.
Sale of Treasury Assets
Since 30 June 2008, the Company has disposed of a number of assets within its structured finance portfolio to minimise the risk on the
Balance Sheet. All remaining CLO securities, CDO securities and SIVs have now been sold or written down to zero. This has reduced the value
of our structured finance portfolio from �747m at 30 June to �494m (based on end-August mark-to-market prices for the remaining assets).
Additionally, the Company has disposed of �40m of asset-backed securities held within its liquidity portfolio.
Following the sale and write down of the CDOs, CLOs and SIVs, the Company's structured finance portfolio consists solely of Principal
Protected Notes to the value of �434m and Credit Funds of �60m.
Richard Pym, Chief Executive, said:
"The changes we have announced today focus the business as a strong savings bank, reduce the size of our lending activities, and
increase our capacity in arrears collection.
We are a strongly capitalised bank now undertaking a complex transition with regrettable job losses, but we are planning to put the
problems of the past behind us and have a business which is fit for purpose going forward."
ENDS
Additional information
Sale of Treasury Assets
The combined pre-tax loss on sale for these disposals is �50.8m. The sale of these assets reduces shareholders' funds by the post-tax
amount of �36.6m as many of the disposed assets have already been previously written down through the Available For Sale (AFS) reserve on
the Balance Sheet. As a consequence, a pre-tax amount of �66.6m has been transferred to the Income Statement from the AFS reserve.
Additionally, a number of unsold CDOs and SIVs have been written down to zero since 30 June, incurring a pre-tax impairment charge of
�15.3m, and the remaining value of synthetic CDOs and CLOs was written to zero in July through a pre-tax fair value charge of �1.1m.
Summary Income Statement impact of Treasury Assets from 30 June 2008 to 24 September 2008
�m
Loss on sale (�50.8)
Impairment (�15.3)
Fair value charge (�1.1)
Transfer from AFS reserve (�66.6)
Total Income Statement impact (�133.8)
Structured finance portfolio at 24 September 2008
Total �m1 AAA AA A BBB CCC & Below Total
PPNs 434.1 53% 43% 4% - - 100%
Non synth CDOs - - - - - - -
Synthetic CDOs - - - - - - -
Non synth CLOs - - - - - - -
Synthetic CLOs - - - - - - -
SIVs - - - - - - -
Credit funds 59.5 - - 60% 40% - 100%
Total 493.6 47% 38% 11% 4% - 100%
Analysis of investment by geographic region
Total �m1 UK Europe US Other Total
PPNs 434.1 55% 40% 4% 1% 100%
Non synth CDOs - - - - - -
Synthetic CDOs - - - - - -
Non synth CLOs - - - - - -
Synthetic CLOs - - - - - -
SIVs - - - - - -
Credit funds 59.5 - 100% - - 100%
Total 493.6 48% 47% 4% 1% 100%
Analysis of investment by type of asset
Total �m1 Mortgage Backed Asset Backed Corporate Loans Other Total
Securities Securities
PPNs 434.1 - 5% 79% 16% 100%
Non synth CDOs - - - - - -
Synthetic CDOs - - - - - -
Non synth CLOs - - - - - -
Synthetic CLOs - - - - - -
SIVs - - - - - -
Credit funds 59.5 - - 80% 20% 100%
Total 493.6 - 4% 79% 17% 100%
Note 1: Valuation of remaining assets based on prices as at 31 August 2008
Restructure of GMAC contract
As announced on 23 September, the Company and GMAC-RFC confirmed that they have successfully renegotiated the terms of their mortgage
forward sale agreement.
Under the original terms of the agreement, signed in December 2006, the Company agreed to purchase a minimum of �350m of UK mortgage
assets per quarter, with �1.75bn remaining to be purchased before the end of 2009.
Both businesses have agreed to revise the terms of this agreement to their mutual benefit whereby �500m of loans will be acquired in Q4
2008 and between �225m and �250m in Q1 2009 after which the agreement will cease. GMAC-RFC will receive in lieu, the equivalent of the
premium that would have been paid should the agreement have run the full term.
Contacts:
Media Relations Investor Relations
Tony McGarahan Katherine Conway
+44 (0) 20 7067 +44 (0) 1274 554928
5511 Neil Vanham
+44 (0) 7501 +44 (0) 1274 806341
500164
Matthew Newton,
Finsbury
+44 (0) 20 7251
3801
This information is provided by RNS
The company news service from the London Stock Exchange
END
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